Facebook Courts Its Future Neighbors

Company Adopts Open Planning Process to Head Off Complaints Ahead of Menlo Park Move; City Revenue Questions Loom

By

Geoffrey A. Fowler

Updated Feb. 24, 2011 12:01 a.m. ET

MENLO PARK—Facebook Inc. has decided to move its headquarters from Palo Alto to Menlo Park. Now it has to win over its new neighbors, many of whom welcome the company's initial efforts to engage the community even as they wonder how the social-networking giant will affect city infrastructure and revenue.

ENLARGE

A projection of the future Facebook campus in Menlo Park, a site the social-networking company is taking over from Sun Microsystems.
Getty Images

On March 5, Facebook will host an unusual public planning meeting at its new campus, which it is taking over from Sun Microsystems. Dubbed a design charrette, the 12-hour event is intended to allow community residents, Facebook employees and architects to brainstorm about how the company's move might transform a town that has found itself divided over the pace of development.

The proposals will tackle how to refine the perimeter of the fortress-like campus, how to handle traffic as Facebook boosts staffing as well as how to build up housing and services such as stores in an area that currently doesn't even have a major grocery market.

"We don't want to put up fences," said
John Tenanes,
Facebook's director of real estate. "I am excited to see what people's visions are for the area."

Ideas may be the easy part. Development has been a hot-button issue in Menlo Park, a Silicon Valley town of about 30,000 that lately has found itself torn between residential and business interests.

Last year, a proposed office and hotel development known as Menlo Gateway ignited such fierce debate about planning and environmental impact that the city council put the project up to a vote on the November ballot. It won the support of 65% of voters.

ENLARGE

Matt Henry, president of the Bell Haven neighborhood association in Menlo Park, says he has spoken with Facebook about the community's needs for improved services.
Lianne Milton for The Wall Street Journal

At a city hall news conference Feb. 8 to announce Facebook's arrival, Mayor Richard Cline acknowledged there were debates to come. "We're going to talk about what we can do, what we can't do, we're going to talk about traffic, we're going to talk about transit, we're going to talk about tax money and we're going to talk about public benefit," he said. "We're going to have a fight and it's going to be loud."

Facebook's Mr. Tenanes said he expects the company's plans will be only a fraction as controversial as the Menlo Gateway project, about two miles down the road, because it largely involves reusing a 20-year-old complex. Still, "this is why we have asked the community to come in and help talk about what's going on and around the Facebook campus."

Facebook doesn't require city approval to move in this summer, since it is taking over an existing (albeit largely empty) campus that has already been permitted for 3,600 employees. Today Facebook has about 1,400 employees in the area, though it has been growing at about 50% per year. Facebook is renting the 57-acre campus from the Wisconsin Investment Board, which bought it from
Oracle
Corp.
after Oracle took over Sun a year ago.

Next year, Facebook expects to present plans to the city for further development, including proposals for an empty lot near the new campus it has bought for expansion. During those talks, the city also might negotiate for Facebook to contribute public-benefit funds to the city, since its free online services aren't susceptible to sales tax and the complex's owner pays the property taxes.

City Council member Andrew Cohen said compensating the city "is a question of fairness" for companies such as Facebook. "I am just hoping that this kind of tenant will be forthcoming and understanding of Menlo Park's needs, which are not insignificant," he said.

Part of Facebook's interest in the community stems from its desire to replicate the college neighborhood feel it had in Palo Alto as a start-up. That won't be easy on the former Sun campus, which was once dubbed Sun Quentin by employees—a reference to the San Quentin prison—because it is separated by a major highway from the rest of the city.

Facebook doesn't plan to change much about the exterior or parking at the complex, but it does plan to convert an interior courtyard into something that feels like an urban main street, perhaps even with local business storefronts.

Matt Henry,
president of the neighborhood association in Belle Haven, the working-class community closest to the campus, said he thinks Facebook will "bring energy into our community that is really needed."

Belle Haven, whose 6,000 residents live on the edge of Menlo Park, hasn't benefitted as much from the economic prosperity that has lifted housing prices elsewhere over the years. Mr. Henry said he has spoken with Facebook's Mr. Tenanes about the community's needs for services such as shopping, and how the company's presence might upgrade its school district, which is separate from the rest of Menlo Park schools.

So far, residents and politicians who opposed the Menlo Gateway project say they are willing to take a wait-and-see approach with Facebook.

"I think there are a lot of unknowns at this point," said
Charles Bernstein,
the president of an education company who ran for City Council last year. "The real issue is density. If the intent is to increase density substantially, the problem is that the infrastructure for it just doesn't exist."

But Mr. Bernstein adds: "It is certainly a feather in Menlo Park's cap to have a prestigious company select it for its headquarters."

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